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The first half of 2022 revealed just the tip of the economic setback iceberg, the second half will uncover the rest. With the first signs of the crisis only starting to appear at the end of spring, economic growth reached 4.3% year on year in Q1 of this year. This was largely due to active foreign trade, strong consumption both by the business and the private sector, and steadily growing income levels. However, our GDP forecast has been downgraded to 2.1% in 2022, as the full effect of the EU’s economic sanctions and Russia’s retaliation measures is expected to materialise in the second half of the year, both via a reduction in demand by foreign trade partners and upward price pressure. With inflation hitting a record 18.8% in April and continuing to climb, we have raised our inflation forecast for 2022 to 14.5%. Political tensions (the break-up and a likely ‘on the fly’ change of the coalition government) as well as above-budget spending by the government, including support to low-income households, are likely to leave a long-lasting mark on economic growth and inflation, respectively.
        FORECAST*
Main Economic Indicators201920202021202220232024
Population, 1000 persons132713301331...
GDP, real change in %4.1-3.08.32.13.43.1
GDP per capita (EUR at PPP)257902516028200...
Gross industrial production, real change in %6.9-3.07.2...
Unemployment rate - LFS, in %, average4.46.86.26.75.54.0
Average gross monthly wages, EUR140714481547...
Consumer prices, % p.a.2.3-0.64.514.57.54.0
Fiscal balance in % of GDP0.1-5.6-2.4-4.5-3.0-1.8
Public debt in % of GDP8.619.018.1...
Current account in % of GDP2.5-0.3-1.6-0.2-0.4-0.3
FDI inflow, EUR m271830555985...
Gross external debt in % of GDP76.391.186.9...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2022

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Bernhard Moshammer, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2022
58 pages including 4 Tables and 21 Figures

Details

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Executive summary

Vasily Astrov
in: Overshadowed by War and Sanctions
wiiw Forecast Report No. Spring 2022, April 2022 , pp. I-VII
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